Opinion
August 5, 1952. Rehearing Denied September 23, 1952.
Appeal from the Circuit Court for Dade County, George E. Holt, J.
Gramling Gramling, Miami, for appellant.
Vernon W. Turner, Homestead, for appellee.
This is an unfortunate case which grew out of a dispute between father and son. It resulted in a bill filed by the father and mother against the son for the purpose of having the court declare a grove management contract between them terminated, for an accounting against the son and to enjoin him from going on the grove. The son filed an answer praying for affirmative relief. During the litigation, the mother died. After a reference to the Master, the taking of voluminous testimony, and the filing of a report by the Master, the Chancellor entered a final decree in favor of the father. This appeal is from that decree.
The father and mother owned and lived upon an 80-acre citrus grove, consisting of grapefruit, orange and lime trees. There were eleven children. All of them had left except one 50-year old son, who was an incompetent. The grove was in bad condition. The hurricane of 1945 did considerable damage which had not been repaired. It was starved and in a rundown condition for lack of fertilizer, spraying, pruning and attention necessary to keep a grove in good condition. The father was getting old and feeble and he proposed to the son that he take over the care and management of the grove, rehabilitate it, furnish all labor and fertilizer and other expenses, and pay the father the sum of $200 per month and take care of the mother, father and invalid son during the balance of their lives. In consideration of this the father and mother would convey, or will, to the son 40 acres of the grove, which 40 acres was pointed out to the son. The son was to build for himself a motor court on this land. All monies received from the sale of fruit, over and above the $200 per month to be paid to the father and $200 per month to be retained by the defendant for his services, would be divided equally between father and son.
The father advised his son that he had made the same proposition to another son who had rejected it. The son here, the appellee, accepted the proposal. The father later advised his son that he had reduced the proposal to writing. It was never signed nor exhibited to the son but was taken to a lawyer's office to be put in legal form. Based upon this verbal agreement the son took over the management of the grove and out of his own funds purchased trucks, tractors and other equipment, and furnished labor, fertilizer and spraying for the grove. Thereafter, the agreement was taken to a lawyer in Homestead, who advised the father that the agreement would not be legal because the 40 acres was part of a homestead but that a contract could be made in a different way. The father's lawyer was instructed to prepare a legal contract. Before the written contract was prepared and signed, the son paid to the father on April 1, 1947 $200, on May 1, 1947 $200, and on June 1, 1947 $200.
After the son had taken over the management of the grove, the father and mother decided to take a four-months trip to Pennsylvania. On May 7, 1947, the day before they left for Pennsylvania, the father and son went to the lawyer's office and found that the attorney had prepared a grove management contract which altered the original oral contract in that monthly payments were increased to $250 per month. There was nothing in the written contract about the son supporting the mother, father and invalid son and nothing with reference to the 40 acres of land. Before the contract was signed the father promised the son that he would have the agreement relating to the 40-acre tract prepared by his attorney who would send it to him in Pennsylvania and he would execute and return the same to his lawyer for delivery to his son. Testimony shows that the attorney was present when all of this took place and he was also present at the hearing and did not see fit to deny this testimony.
The day following the signing of the management agreement, the son took the mother and father to Pennsylvania. During the trip the father reiterated his promise with reference to the contract for the 40 acres. The son and his wife returned from Pennsylvania where the son continued to work on the grove.
In June, 1947, the son mailed a check for $250 to the father. Thereafter, the father wrote to the son and advised him not to make any more monthly payments as he had sold a piece of property and instructed the son to put the money in the grove, which the son did for a long period of time thereafter.
The father returned from his visit to Pennsylvania in October and more than a year after the execution of the written contract, the father asked the son how they stood and the son exhibited to the father his statements of receipts and expenditures. Thereafter, the father asked the son a total of about six times how they stood, and on each occasion the son showed the father his records consisting of receipts of money from the proceeds of the grove and receipts for expenditures. According to the undisputed testimony, the last time the father asked the son how they stood was in February, 1950. At that time he asked for some money. The son showed the father his statements of income from the sale of fruit, receipts for expenditures and told his father that back payments, which he owed to him and which had been deferred, amounted to about $9,000, which would be paid out of the proceeds of the fruit then on the trees which was ready to pick. At that time the son paid to the father the sum of $400. Up to this time there had never been any quarrels between father and son and they were on friendly terms. On April 21, 1950, and without any notice whatsoever, the father mailed to his son a letter stating that the father had abolished his son's job. Said letter is as follows:
April 21, 1950.
"Homestead, "Mr. Frank H. Bernecker "Homestead, Fla.
"Dear Sir:
"I herevit abolish your job as menager of Bernecker groves. Reason you are unalbble to keep the contract, so find yourself on other job by May 1, 1950.
"Very truly yours, "(Signed) Frank L. Bernecker "R. 2, Box 326 "Homestead, Florida."
At the time of this letter, according to the uncontradicted testimony, there was fruit on the trees ready to be picked of the net value of $10,400, and also fruit on the trees for the 1950-51 crop ready to commence picking in September, 1950, of the net value of $18,000. This fruit had been produced by reason of the work, spraying and fertilizing which the son had furnished, except for a further application of approximately twenty tons of fertilizer to be applied during the summer months and which would cost approximately $1,350. All of this fruit was taken over by the father on April 21, 1950, and the son was not permitted to do anything further about it or participate in the net proceeds therefrom. It may be true that the father, after he took over, permitted a large part of the crop of limes to fall to the ground and spoil. This was not the fault of the son and he cannot be charged with what happened to the fruit after the father took over. When the father abolished the son's job, the grove was in excellent condition. It had been rehabilitated by the care, work and management of the son and by fertilizer and labor furnished by him and was in a condition to produce a maximum yield.
The father considered the oral agreement in regard to conveying a 40-acre tract to the son as being a separate contract and having nothing to do with the grove management contract. However, it is undisputed that when the son and his wife returned from Pennsylvania they took the invalid son to their home and the son's wife took care of the invalid son. The son and his wife moved onto the grove and the son's wife did all of the housekeeping, cooking, washing and caring for the invalid son. When the father and mother returned from their four-months trip, the son started to build the motor court on the land which had been pointed out to him by the father and which the father had agreed to convey to him. Upon the return from Pennsylvania, the father found that the son had cleared a space and was advised by the son that he was going to build the motor court. The father made no objections to the building of the motor court on the site selected. He lived within 70 feet from the spot where the motor court was being constructed and from time to time visited the building during the erection of same and on one occasion actually receipted for a delivery of cement on the job.
On the 15th day of June, 1950, the father and mother filed a bill for declaratory decree against their son and attached thereto the grove management contract. The bill alleged that the son had not made the payments of $250 per month called for by the contract; that he was in arrears in the sum of $9,305; that the son had constructed a permanent concrete block building of a permanent nature, unmovable, upon a portion of the grove. The father and mother alleged that they had complied with the terms of the contract in full but that the son had refused to pay to them the amount due under the contract and had refused to vacate the structure which he had erected upon the property. The bill prayed that the court would: (1) decree that the contract had been terminated by the son, (2) that the court enjoin the son from coming on the property or remaining on the property and issue a permanent injunction removing the son from the property, and (3) that the court adjudicate the amount due by the son under the contract and render a judgment in favor of father and mother against their son for the amount found to be due. There was no offer to do equity.
The management agreement attached to the bill of complaint stated that the owners "are unable to care for said groves personally, and whereas, they hold great trust and faith in the manager to take care of said groves in the best manner possible". Other pertinent parts of the contract are:
"First: That the owners do hereby turn over the aforesaid lands to the manager for the care and operation thereof during the lifetime of the owners herein set forth, and during the lifetime of the survivor of them, unless this agreement is terminated as hereinafter set forth.
"Third: The manager herein agrees that he will fertilize, spray, drag, mow and generally care for said groves according to the best prevailing practice now in effect or which shall become the custom at a later time in the Redland District area.
"Sixth: It is further agreed between the parties hereto that any net profits derived from the operation of said groves during any one year shall be first applied to the payment of the aforesaid Two Hundred Fifty Dollars ($250.00) per month to the owners of said groves, and if the said annual net profits are in excess of the annual amount paid to the said owners, then the balance shall be next applied to the payment of Two Thousand Four Hundred Dollars ($2,400.00) per year to the manager of said groves; and if the net profits of said groves are in excess of the amount paid to the owners and the manager, then the balance of said net profit shall be divided between the owners and the manager, one-half to the owners jointly and one-half to the manager.
"Eighth: The manager further agrees to keep all buildings upon said land all equipment used in the management of the groves upon said premises in a good state of repair and upkeep, and all expenses so incurred shall be considered as expenses in the management of said groves."
The 12th paragraph of the agreement is the only paragraph with reference to the termination of the contract except that set forth above and is as follows:
"Twelfth: This contract may be terminated by either party hereto upon giving to the other party (6) months notice of his intention to so terminate this contract; said notice to be in writing and to be delivered to the parties by registered mail addressed to their last known address, or by posting copies of this notice at prominent places on the premises. This contract shall be terminated upon the death of the manager or upon the death of both of the owners or either of them."
In the answer filed by the son he admitted that the management contract as executed provided that he should pay $250 per month to his mother and father and that he executed the same because of his filial love and duty to his parents and because they reaffirmed their intention to convey to him 40 acres of land upon which he could construct a tourist court and thereby insure the payment of the monthly payments. The son denied that he had only paid $850 on account on the monthly payments but alleged the truth to be that he had paid $1,050; that the concrete block building was constructed with the complete consent and approval of his mother and father and was on a portion of the land which had been pointed out to him by them and which they had agreed to convey and deed to him; that the contract required six months notice for termination and that no such notice had been given to him; that relying upon the representations and promises of his mother and father that they would deed to him the 40 acres of land, he sold his business, his home in Homestead, and moved onto the lands of his mother and father; that he invested monies, time, effort and labor to the operation of the grove and purchased equipment to properly care for the grove, all of which had been paid for with his own funds. The son denied that he had breached the contract with reference to the payment of $250 per month and averred that the mother and father advised him not to make the monthly payments but to use the same for expenses of building up the grove and relying upon such direction from the father and mother, he used all available funds to properly maintain, fertilize, work, spray, and build up the grove; that also relying upon the parental word of the father and mother, he invested and used his own personal money and that of his wife in constructing the building.
By way of counterclaim, the son prayed that: (1) he be declared to have an equitable lien for the value of the concrete building, (2) that the court adjudicate the amount due the defendant for the expenses and investments in equipment for operation of said grove, (3) that the court adjudicate the amount due the defendant for time and labor in managing the grove, and (4) that the court grant such other and further relief as in equity may seem proper.
The cause was referred to the Special Master, who took voluminous testimony, and his report contained findings of fact and conclusions of law. Exceptions to the report of the Special Master were filed, all of which were overruled. The decree of the Chancellor approved in full the report of the Special Master and was based thereon.
The only breach of the contract alleged in the bill of complaint was the nonpayment by the son of $250 per month required by the contract and the bill prayed that the court declare the contract terminated by the defendant by reason of the nonpayment of these monthly payments.
There was some dispute as to the amount of money which the son had spent in erecting the concrete block motor court, or the value of such motor court. The Master found the valuation of $12,000 and recommended that the son be given credit for this amount. This part of the report was confirmed by the Chancellor and included in his final decree.
The performance by the son with reference to this land and the building of the motor court while the father either approved or stood idly by and saw it being built, without objection from him, and having placed the son in possession of the property, removed the oral contract from the Statute of Frauds, F.S.A. § 725.01. See Cottages, Miami Beach, Inc. v. Wegman, Fla., 57 So.2d 439. However, in view of the fact that this property was homestead property and the alienation thereof is limited and governed by Article 10 of the State Constitution, F.S.A., that part of the decree of the Chancellor fixing the valuation of the motor court at $12,000, and that the son should be given credit for such amount and paid same by the father, is affirmed.
With reference to the management contract the Master found that the same had been breached by the failure of the son to make the $250 per month payments. The Chancellor overruled exceptions as to this finding and recommendation and entered a decree on this phase of the case in accordance with the Master's recommendations. It is quite evident that an erroneous rule of law was applied. The undisputed testimony was that these monthly payments were deferred at the express direction of the father, given to the son in writing. The father was present at the hearings where the son so testified. He had ample opportunity to dispute his son's testimony, but failed to do so. It is, therefore, evident that the deferment of these monthly payments were at the direction, instigation and suggestion of the father, and not of the son. The father was interested in the rehabilitation of the grove and he asked the son to put this money in the grove, which the son did. The conduct of the father with reference to this $250 monthly payment "lulled the son to sleep" and the son thought he was carrying out the father's wishes, suggestions and instructions. At the last conference between father and son, statements, bills and receipts were exhibited and the son advised the father that he owed him approximately $9,000 on account of these deferred payments. At that time the son paid on account the sum of $400 and advised the father that the balance would be paid from the proceeds of the fruit on the trees. At this conference there was no intimation or suggestion that the job was to be abolished or the grove management contract rescinded or terminated. It was only after the receipt of the $400 and the father saw his grove rehabilitated so that it would produce a maximum yield; he saw the fruit on the trees, and for some reason unexplained, he decided to arrogate unto himself the right to terminate or rescind the contract, or abolish the job without notice, and deprive the son of any of the fruits of his labor and of the thousands of dollars which the son had spent in fertilizing, spraying, tilling, pruning and otherwise bringing the grove from a condition of waste and ruin to a condition of maximum production.
In 17 C.J.S., § 433, p. 917 of the article on Contracts, the author states:
"A right to rescind because of delay in performance or breach must be asserted promptly, but a delay which is not inequitable does not cut off the right. A delay to give the adverse party opportunity to perform his part of the agreement does not prevent a rescission."
It should be observed that under the terms of the management agreement that the father was very much concerned about the grove receiving proper care and attention. He was concerned about the grove being properly fertilized, sprayed, pruned and mowed according to the best prevailing practice. The whole record is full and complete about the condition of this grove at the time the son took it over. It had just gone through an awful hurricane; during the preceding year the father had only fertilized the grove once; about 1/3 of the trees were down; the father had just sold a piece of property and was not in immediate need of money and after the son had sent the first check for $250, the son was advised in writing by the father not to send any more checks, but to put the money in the grove. This conduct on the part of the father was in keeping with his intention expressed in the contract that the son care for the grove "according to the best prevailing practice". The father had a right to issue instructions to his son that these payments be deferred, but he had no right to stand idly by for nearly three years and see his son spend the savings of a lifetime in properly fertilizing and caring for this grove, and then without notice, terminate the management contract because the son had done the very thing the father requested him to do. Such conduct is inequitable and unconscionable. If the father thought there was a breach of the contract, he should have asserted the breach promptly. His delay and failure to act when he should have acted is inequitable.
The father not only asserted without notice that the contract was at an end, but he claimed all of the fruit on the trees and obtained an injunction to prevent the son from even going on the grove and picking the fruit which his labor and money had produced. Under the terms of the decree, as recommended by the Master, the father took possession of a grove full of fruit in splendid condition, and when it had been brought from a rundown condition, partially destroyed by a hurricane, to that of maximum productivity. In his report, the Master said:
"What are the respective rights of the parties to the proceeds from fruit picked after May, 1950, when plaintiffs elected to terminate the contract?
"The testimony shows that the defendant took over the management of the grove in question on May 7, 1947, and continued such management for exactly three years. As is commonly known, fertilizer is applied to the trees months in advance of the actual picking of the crop. In this instance, fruit was picked and sold after the contract was terminated, and the question arises whether or not the defendant is entitled to all or part of the proceeds therefrom, he having fertilized the grove between November and February prior thereto. The contract of the parties is silent on this point.
"Immediately upon taking over the management of the grove, the defendant received all of the proceeds of the fruit on the trees and the benefit of the fertilizer applications made by the plaintiffs several months prior thereto. It would seem equitable that upon termination of the contract, the reverse principle should likewise apply. It is at least fortunate that the contract began and terminated in the same month. Your Master therefore finds that the defendant is not entitled to any proceeds received from fruit picked after May, 1950."
Part of the decree of the Chancellor was based upon the above quotation from the report and recommendations of the Special Master. This was error.
The son operated under a verbal agreement beginning in March, 1947, and the written agreement never came into being until the 7th of May, 1947. The fruit upon the trees, when the son took over, was of poor quality and of little value. He only received approximately $1,000 from the sale of the fruit and under the direction and approval of the father, this money was spent by the son on the grove. In response to a question with reference to this matter, the father frankly stated that the grove had to be fertilized and that his son used the money from the sale of this small amount of fruit for that purpose.
Even assuming that the father had a right to terminate the contract without notice or that the notice which was given could be interpreted as the six-months notice required by the contract, the termination of the contract would not destroy the rights of the son in the fruit then on the trees produced by his money, fertilizer and labor, any more than if his death had terminated the contract.
It matters not whether this contract be considered as simply a management contract with an interest in the profits, or as in the nature of a partnership contract, or a master and servant contract, or a joint adventures contract, the result is the same. The son had a right to one-half interest in the net profits from the sale of the fruit produced by his money and labor. In the recent case of Johnson v. Burleson, etc., Fla., 61 So.2d 170, 172, a surviving partner refused to account to the legal representatives of the deceased partner for fruit on the trees which had not been picked and sold. The County Judge found in favor of such contention; the Circuit Judge reversed the County Judge and found that one-half of the net proceeds from the sale of the fruit, which had not been picked and sold at the time of the death of the beneficiary of the deceased partner, should be accounted for. This Court held:
"With reference to the one-half of the net proceeds from the fruit on the trees, it is clear that the County Judge made some mistake or applied the wrong rule of evidence or law and the Circuit Judge was correct in including this item to be paid to the appellee."
See also Uhrig v. Redding, 150 Fla. 480, 8 So.2d 4; Philadelphia Storage Battery Co. v. Mutual Tire Stores, 161 S.C. 487, 159 S.E. 825; Groseclose v. Hocking, Mo., 222 S.W.2d 754; 68 C.J.S., Partnership, § 391 (b), p. 905; 68 C.J.S., Partnership, § 394 (b), p. 908; and 40 Am.Jur., Sec. 348, p. 373.
The son, the appellant here, was entitled to share in the net proceeds from the sale of all of the fruit on the trees to be picked during the 1950-51 season, and Section 6 of the management agreement should be applied in accounting to him for such net proceeds.
The law was erroneously applied as to the grove management contract in two respects: first, that the son terminated the contract by following the positive written instructions of the father in deferring and applying the $250 monthly payments, and second, that the termination of the contract, even with proper notice, terminated rights already accrued under it at the time of such termination.
The equities in this case were not with the father but with the son and the costs should be taxed against the father, the appellee here.
Reversed in part and affirmed in part for further proceedings in accordance with this opinion.
SEBRING, C.J., and TERRELL, HOBSON and ROBERTS, JJ., concur.
JONES, Associate Justice, dissents.
On authority of Harmon v. Harmon, Fla., 40 So.2d 209, Hopping v. Lovejoy, et ux, Fla., 53 So.2d 704.